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Logistics Management Awareness and the Implementation of Restaurant Business: an Application of Stepwise Multiple Regression

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Logistics Management Awareness and the Implementation of Restaurant Business: an Application of Stepwise Multiple Regression [157] Logistics Management Awareness and the Implementation of Restaurant Business: An Application of Stepwise Multiple Regression Akhilesh Trivedi Faculty of Hospitality Industry, Dusit Thani College, Thailand E-mail: [email protected] Abstract As logistics are at the heart of the operation of small and medium restaurants, the logistics management implementation of restaurant entrepreneurs is a critical component for achieving their business goals. Therefore, the purpose of this research was to find the factors influencing their logistics management implementation. A self-administrative questionnaire was used as a research tool in gathering data from 400 entrepreneurs who operated small and medium restaurants in Bangkok, Thailand. The research found that the restaurant entrepreneurs were aware of the logistics management at somewhat level. Finally, a stepwise multiple regression was conducted and predicted the tendency of logistics management implementation. The analysis provided the linear combination of six independent variables (entrepreneur’s gender, age, education, experience in business, size of business, and level of awareness in logistics management) which significantly related to the dependent variable (the tendency of logistics management implementation) at a statistical significance level of 0.05. Keywords: Logistics Management, Logistics Activities, Restaurant Business Introduction A supply chain strategy lies at the heart of the logistic idea, working integrally to support a company's overall business objectives. A well-organized logistics supply chains provide many advantages for a business. The business will gain an efficient improvement in customer service concurrently, operating expense control, and capital investment reduction. Recently, Thailand government has extensively encouraged supply chain and logistics management among Thai businesses as a crucial strategy for boosting up competitiveness (Somboonwiwat, Kritchanchai, Wasusri, & Ruktanonchai, 2006). The restaurant sector is one of the most critical industry in Thailand. It continues to grow due to increased spending. According to the Office of National Economic and Social Development Board, Thailand’s hotel and restaurant sectors expanded by 15.9 percent in the third quarter of 2016, 12.7 percent higher than in the previous quarter. As of March 31, 2016, there were 11,020 restaurants registered with the Ministry of Commerce (Sirikeratikul, 2016). However, because of the two primary reasons of unfavorable economic conditions and the government's stricter rules on migrant workers, about 2,300 small restaurants nationwide were forced to close in 2017, according to the Restaurant Business Trade Association (Jitpleecheep, 2017). This situation results in a decrease in a number of the small and medium restaurants. Whereas the arrival number of foreign tourists still increases, the demand for restaurants to operate more efficiently and provide effective services also increases to fulfill the requirements of the customers. An efficient logistics system is a solution for those small and medium restaurants as Gecowets (1979) indicated that logistics is the way to serve customers with a correct product, place, time, conditions, and cost. Eventually, this leads to the research question of this study which is what are the factors influencing on the logistics management implementation of small and Asian Administration and Management Review Volume 1 Number 1 (January-June 2018) [158] medium restaurants. The research results will be a guideline for concerned parties in supporting the entrepreneurs towards a good practice logistics management. Literature Review Many authors have defined logistics management in various ways. The most clearly one is by the Council of Logistics Management (2007), a leading organization for logistics professionals with a current membership of over 15,000. It defines the term of logistics management as a part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption to meet customers’ requirements. Commonly, logistics mean activities that take place within an organization, whereas supply chain means interconnected stockholders that work systematically with the organization to carry a product to a target market (Hugos, 2011). The Council of Supply Chain Management Professionals (2007) stated that logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third-party logistics services providers. To a significant degree, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and implementation strategic, operational, and tactical. Logistics encompass five interrelated activities: customer response, inventory planning and management, supply, transportation, and warehouse (Frazelle, 2002). Moreover, logistics refer to a system of design and administration that is employed to control a changing physical location of raw materials, work-in-process and finished goods at the cost-effectiveness (Bowersox, Closs, & Cooper, 2007). Coyle, Langley, Novack, & Gibson, 2013 gave a short definition that logistics is about obtaining the right product, to the right customer, in the right quantity, in the right condition, at the right place, at the right time, and at the right cost. Finally, Schönsleben (2011) concluded that logistics management relates to the efficiency and effectiveness of the company’s management. It comes with daily activity in manufacturing the company's finished goods and services. Many authors define different logistics activities under the perspective of the restaurant industry. Dani (2015) mentioned that the food supply chain is the sequences of processes and operations that assist in carrying the food from its raw material to customer plates. Managing a restaurant offers great challenges. One of the essential techniques in restaurant management is how to control the restaurant's inventory. Experienced managers have learned that it is necessary to have as many policies and procedures in place as possible as something is always going to come up to demand their consideration. Restaurants that operate with a less margin always keep an eye on cost control. After labor, food costs are normally the largest expense for restaurants. As a result, most restaurants have comparatively strict inventory-control policies (Browne, 2017). Finally, it is accepted that logistics is similar to dining at a restaurant. It is the flow of material, information and money between consumers and suppliers (Frazelle, 2002). After reviewing literature, the operational definition of this study is derived as “Logistic management is a system that results from a marketing orientation and operational efficiencies and effectiveness, time and place utility, and efficient movement to the customer”. This is based mainly on the integrated logistic approach of Stock and Lambert (2001). It encompasses eight area of activities: customer service, order administration, transportation, warehouse operations, inventory management, demand forecasting, production planning and scheduling, and purchasing. Asian Administration and Management Review Volume 1 Number 1 (January-June 2018) [159] Research Methodology Population and Sample The population of this survey was the entrepreneurs who own registered small and medium restaurants in Bangkok. As of March 31, 2017, there were 5,207 entrepreneurs (Department of Business Development, 2017). Using the table for determining the sample size from a given population (Krejcie & Morgan, 1970), the sample size was not less than 358 entrepreneurs. The authors then rounded up the size of the sample to 400. There was no any organizations identified each proportion of small and medium restaurants in Bangkok, generally, they recorded in a total number of SMEs in Thailand. However, the Office of SMEs Promotion (OSMEP) surveyed in 2014 and reported that the number of SMEs in the service sector of Thailand was 1,041,818. Within this number, the small enterprises accounted for approximately 99.50 % and medium enterprises for 0.5 % (The Office of SMEs Promotion, 2015). As the population is partitioned into sub-population, therefore, it was rational to apply a stratified sampling method. This method is famous because it helps to improve a possibility of precision in sampling (Malhotra, 2007). Table 1 Deriving Samples based on a Stratified Sampling Method The service Number of Proportional stratified Disproportional stratified sector of service sampling sampling Thailand businesses in Percentage of Number Equal Number (Number of each stratum total SMEs of Percentage of of stratum) samples SMEs samples Small 1,036,598 99.50% 398 50% 200 Enterprise (S) Medium 5,220 0.50% 2 50% 200 Enterprise (MEs) Total SMEs 1,041,818 100.00% 400 100.00% 400 The process starts from dividing the population into groups, called stratum. As we can see in table 1, SMEs in the service sector of Thailand was classified into two strata, then the percentage of each stratum was derived as a proportion of total number of SMEs in this sector. Normally, a random sample is selected from each stratum based on
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